Signal Type	Trade Date	Index	Return since issued
		Nasdaq 100
		Russell 2000
		S&P 500

Market Update

Continuing to show strength, all major indexes moved higher again over the 5 day-span, albeit more modestly than during the previous week. After a rather uneventful Monday in which stocks posted small gains on low volume, the main averages retreated Tuesday following a disappointing outlook from Texas Instruments and cautious comments from blue chip companies McDonald's and DuPont. Record oil prices just below $120 a barrel also did not help. The weakness did not last as positive earnings news from Broadcom helped push tech stocks higher Wednesday, the Nasdaq composite gaining 1.2% during the session on brisk volume. Stocks proved to be resilient Thursday: after a lower open following weak earnings forecasts from Apple, Amazon.com and Starbucks, the market turned around to post solid gains on the day as volume increased for the second straight session. With Microsoft issuing an underwhelming earnings outlook after the close, stocks dropped Friday morning. A weak reading on consumer confidence also weighed on investor sentiment. By mid-day, however, the major averages started to recover and if the Nasdaq Composite still finished with a marginal loss for the day, the S&P 500 posted a 0.65% gain.

For the week, the Nasdaq 100 gained 0.96%. The index is still located above both its 50-day and 200-day Exponential Moving Averages (EMAs). The S&P 500 and Russell 2000 respectively gained 0.54% and 0.11% over the 5-day span and both indexes are situated in-between their 50-day and 200-day EMAs.

For its part, our World Index Ranking portfolio outperformed its U.S. counterparts this week with a gain of 2.24%. The portfolio consists of the 5 top-ranked world indexes as of March 28, which marked the beginning of the current 4-week holding period. The World Index Ranking portfolio is being rebalanced today, as the current 4-week holding period is now over.

Our current Buy signal remains in effect.

Trend Timing School

Money to dedicate to the stock market
The very subject of money is very delicate and personal, sometimes even taboo. Many people do not want to discuss it. We fully support discretion and privacy aspects of money but for once, since we are amongst friends sharing similar wealth building ambitions, we will make an exception and address the age old question of "How much money should I invest in the stock market?" head-on.

Money being one of the two primary ingredients of the Trend Timing wealth building system (the other one being time itself), we feel it is an appropriate topic for this editorial. While how much money to invest is a highly personal question, and we recognize that not one size fits all, we always reply without hesitation "Substantially all your serious money".

We are not Financial Advisors but from experience we can clearly state that any meaningful wealth building system begins with the identification and long term commitment of funds, what we call serious money.

• We have been taught that all money is serious, so what is serious money?
  Any money that you do not need to live or as working capital in the near term should be viewed as serious money that you set aside and put to work entirely for your wealth building system.
• When?
  The sooner the better.

You don't withdraw serious money to pay bills, or to buy this summer's vacation. You don't use serious money to speculate or gamble on risky, get rich quick schemes. Serious money is your long term savings and retirement plan. What is long term? For all practical purposes, it is the rest of your life.

Now that we have defined what serious money is, how prudent is it to recommend that all of it should be invested in the stock market according to the Trend Timing Model?
We have always been firm advocates of diversification, and we recognized the wisdom of asset and strategy diversification as good risk management disciplines in several of our editorials. Our stock portfolio will be diversified by definition because we advocate investing exclusively in market index instruments which represent broad baskets of companies and industries. If you are willing to add assets diversification to your investments, you may want to consider the ETFTide system which encompasses not only broad world equity markets but also ETFs investing in specific industry segments as well as non-stock asset classes such as bonds, commodities, currencies and real estate.

Because a Buy and Hold approach to investing guarantees riding every correction and bear market to the bottom, conventional wisdom has complemented this strategy with portfolio diversification to limit exposure to such stock market declines. As such, you would allocate only a fraction of your serious money to equities, and the balance would be placed in non-correlated investments or income producing instruments. We have always rejected such performance crippling wisdom. In fact, the most prominent difference between Buy and Hold and Trend Timing is precisely the "all-weather" characteristic of staying on the right side of the market and therefore benefiting from both rising and declining markets. This is why we are eager to put ALL of our serious money to work in the stock market ALL of the time. The more the better. The only exception would be in the case of a Cash signal.

We appreciate the level of confidence, trust, and courage involved in the decision to commit serious money to an investment system. It does not have to be Trend Timing. As long as you select a time proven, all-weather investment method that meets your risk/reward tolerance, and that you can emotionally stick with for the long term, we know that you will be better off than if you hesitate on the sidelines. Money left sitting in cash or money market funds is not bearing any fruits, and is in fact steadily losing value due to inflation. Even if you decide to test the waters by committing only a fraction of your serious money, the consequence is watered down results.

We urge the uncommitted and partially committed to learn to trust a system soon because one thing is for certain, without a system and without long term consistency there can be no meaningful wealth building.

FAQ of the Week

Question: Can I use leverage with your service?

The short answer to this question is certainly yes, but could also be "it depends"! It depends on the strategy, for example we would not recommend using leverage with the World Index ranking because its top performers tend to be very volatile. This volatility can induce large drawdowns from time to time and not everyone could handle amplifying the bumpy ride further with leverage.

For strategies investing in US domestic indexes, choosing the amount of leverage to apply is one of the few decisions we need to make. The answer to the question "How much is too much?" is of course highly personal and varies greatly based on our individual risk tolerance. The point at which greed meets with fear is different for all of us.

One thing we can state categorically is that we consider it folly to buy fully leveraged investments on margin. Specifically, what some extremely brave and/or foolhardy investors do is to buy the 2x bull/bear index ETFs or mutual funds from the likes of ProFunds and Rydex on full margin, for a resulting leverage of 4 to 1. While they could laugh all the way to the bank if the market fully cooperates, there are possible worst-case scenarios that you need to consider first. Let's say we experience a 15% drawdown which triggers a Cash signal, by the time we liquidate an unleveraged position the next day we could be down more or less than the 15% signal trigger (never forget that markets have been known to move by over 20% in a single day), but with the 4x leverage you would lose 60% or more of your capital in one fell swoop. And it takes a 150% gain to breakeven from a 60% loss!

We are all in favor of a conservative use of margin. We believe most investors cannot tolerate the wild ride of full leverage (100%) during volatile times. Instead, we commonly advocate an 80/20 blend of non-leveraged/leveraged investments.

Warm wishes and until next week.

The TimingCube Staff